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Your Money

News/Business. Christine Romans breaks down the financial news of the week. New.

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CNN

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00:31:00

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San Francisco, CA, USA

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Comcast Cable

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Channel v759

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mpeg2video

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ac3

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1920

PIXEL HEIGHT
1080

TOPIC FREQUENCY

U.s. 5, Us 4, Usaa 3, Hp Moonshot 2, Axiron 2, Cisco 2, Buk 2, Steve 2, Underarm 2, Glucerna 2, China 2, Europe 2, America 2, Lactaid 2, Ashton Kutcher 2, Boris 2, Facebook 1, Bob Filner 1, George Zimmer 1, Blackberry 1,
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  CNN    Your Money    News/Business. Christine Romans breaks  
   down the financial news of the week. New.  

    August 17, 2013
    6:30 - 7:00am PDT  

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gadgets, manufacturers are leaving security holes where hackers can attack you and your family, and you don't pay for facebook or gmail, and those companies are selling something, selling you, and they scan your data to build a profile and they target their ads and the more they know about you, the more they pay. consumer groups were outraged this week after google filed a legal motion earlier this summer and in it google's lawyers referenced a ruling that says, quote, a person has no legitimate expectation of private in information he voluntarily turns over to third parties. >> you can choose not to give us this information, but if you give it to us, we can do a better job of getting services to you. >> why is the u.s. government looking over your shoulder?
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>> america is not interested in spying on regular people, and our focus is finding information necessary to protect our people and protect our allies. >> i want to bring in the former directeder of the national cyber security center. rod, is the message here that we shouldn't put anything sensitive in e-mail or online that there is no expectation for privacy in what we do in a very technology-driven world? >> anything you put online is definitely at risk. i will say that. you can make some choices better than others to protect your privacy, but if you are e-mailing online, you are taking the risk that can be disclosed. >> we are clicking accept, and that is what happened to kyle in an episode of "south park." listen. >> what are you going to do to us? >> everything that you agreed to in the itunes conditions. >> we didn't read them. >> right, who just agrees to
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something they don't read? >> we get the point. a lot of people do that. we hear a lot of buzz every time they change their terms of service, but so far there is no mass user revolt. they do it for convenience and don't have a lot of other choices? >> yeah, i don't know what is going to push it over the edge. there are three cat goes, those that don't know what is going on, and those that do and are comfortable with all the gathering on them, and there is a minority of what they sense is a violation of their privacy. >> i have to tell you, this is what the google statement to us, we take our users' privacy and security very serious, and recent reports claiming otherwise are simply untrue, and we have built industry-leading security and privacy features into gmail. do you think those criticisms
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were overstated this week? >> i think, you know, people need to understand what companies are doing and make their own decisions. for some people, it's a problem and they don't feel comfortable with that and other people may feel comfortable sharing everything with a company, so it really depends on the perspective. >> depends on the perspective, and there is always that phrase, if something is free, somebody is trying to make money. there is always a business model. if our online lives are being tracked they are at risk of being hacked, that's no surprise, but what is going on in your home is vulnerable too. >> it almost reads like a movie script. it happened this week to a family in texas. are you freaked out yet? it's not just baby monitors at risk, and your home can be
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hacked too, if you are not careful. imagine your 2-year-old daughter sleeping and an outsider watching her through the baby monitor. that's what happened to a family in texas this weekend. they discovered the problem when they heard a man yelling at their toddler, reading her name off her bedroom wall. >> he said wake up, alison, you little [ bleep ]. >> the gilberts believed their house was hacked. and somebody kind of did. and there are more and more ways to hack your house, and many devices that are vulnerable. >> i can tell the light to please unlock the door. >> that's a hacker, literally unlocking your door. the smart lock is connected to a device that enables you to control your appliances from your home, and a researchers found a flaw in that device. >> i ran code on the light and compromised it, just setting up a backdoor, or i can control any
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device hooked up to it. >> in a world full of these devices that let you do anything from flush your toilet to turn on your lights through a smart phone, a hacker can make your house feel haunted. >> basically, i can open up these rooms associated with the device, and control them, either turning them on or turning them off. >> sound like something casper would do? these security researchers found an issue with this hub that enabled somebody to take control of the devices took to it, and this toy rabbit has a camera designed for keeping an eye on your kids, but somebody else could, too. >> that traffic, i was able to capture and pull from it a url, which is was the direct video feed, and as long as the access token was still valid and had not been expired yet, i could watch that video feed indefinitely. >> they fixed the issue identified by the researchers,
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and they stress that a hacker requires an insecure wi-fi connection, and a majority of their users have internet connections. as for ways to stay safe, always put a strong password on your internet connection, and keep your software up-to-date, and never click on links from strangers. and had the family updated their family with the baby monitor, this would not have been an issue. and how many times do you look at a baby monitor and think i have to update the software? this is a whole new reality we need to look at. we all know steve jobs was a brilliant tech intrapreneur, but the man playing him on the big screen is no dummy himself. >> the sexiest thing in the entire world is being really smart.
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>> no, you are not getting punked. more on the business of ashton kutcher, next. with diabetes, it's tough to keep life balanced. i don't always have time to eat like i should. that's why i like glucerna shakes. they have slowly digestible carbs to help minimize blood sugar spikes. [ male announcer ] glucerna. helping people with diabetes find balance.
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one that's 80% smaller. uses 89% less energy. and costs 77% less. it's called hp moonshot. and it's giving the internet the room it needs to grow. this&is gonna be big. hp moonshot. it's time to build a better enterprise. together. mayo? corn dogs? you are so outta here! aah! [ female announcer ] the complete balanced nutrition of great-tasting ensure. 24 vitamins and minerals, antioxidants, and 9 grams of protein. [ bottle ] ensure®. nutrition in charge™.
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billionaire activist, karl icon, has never been shy and now discovered twitter. spoke to tim cook today, and more to come. that's a $1.5 billion investment. apple stock soared this week in
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the wake of the tweet heard around the investment world, and the stock has been climbing back from a low of $390 a share back in april, and still well off the highs. investors still worrying. skepticism shared by oracle ceo, and among others who called steve jobs irreplaceable. >> we will not be nearly so successful because he is gone. he was brilliant. he was our edison or picasso. >> but apple's operating system has been losing market share to google's android, and that runs from devices from samsung among others, and they are often cheaper than iphones, and that's the buzz that there is a phone
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that could be announced for september. the grandfather to the smart phone isn't. remember these? five years ago, blackberry had more than half of the smart phone market and today 2%, lagging way behind its rivals. the company's new operating system is designed to appeal to consumers, and now blackberry says it could be put up for sale. what would it be selling? a user base and patants which could be worth $1 billion by themselves. and apple, and the movie out this weekend, everybody is interested in steve jobs, but what about the actor playing steve jobs. >> i would like to introduce you to the ipod. >> portraying steve jobs on the big screen. >> he is a hero of mine. i admire him. >> playing the role of a
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brilliant tech intrapreneur is hardly actor, and he is a very involved and tech investor, and he studied biochemical engineer, and he dropped out leaving the lab for the runway. fame soon followed. despite prominent roles as good looking but dimwitted, he is no dummy when it comes to startups, and he recognized the value of twitter very early, and he became the first twitter user to get 1 million followers, and today he pushes his investments to 14 million followers. he was part of an early group of skype, and back then it was valued at $2.75 billion and two years later, microsoft bought
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skype for more than triple that. he invests through his own venture capital fund, agrade, and he is laughing all the way to the bank. he is the highest paid actor in television. raking in an estimated $24 million last year for his work on "two and a half men," not to mention top dollar endorsements like his deal with nikon. now he has the lead role playing the iconic steve jobs, and the business of being ashton kutcher is -- >> oh, yeah. >> they say everything is bigger in texas. dallas cowboys, the most valuable team in the national football team, and it's worth $2.3 billion thanks to a $500
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million deal it struck with at&t back in july for the naming rights to the stadium. and the new england patriots are the second most valuable team. and texas is also king of the college game. the university of texas at austin rakes in the most cash for it's merchandise. and it's the eighth year in a row the long horns have taken the spot. and finally, football is coming back to los angeles, or arena football that is, and the l.a. kiss will start playing in 2014, and the rock band kiss will back the team as well as other investors. you have to provide the face paint. up next, after back to back triple digit losses, what is behind the pullback in stocks? thank you. that's three new paper shredders.
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a summer swoon. this year we saw back to back days of triple digit losses in stocks, and what is troubling them? it's getting close to september, and they are saying septaper, and the fed has room to taper. we have weak consumer spending signals, like wall street and macy's, and add to that like cisco, the number one's internet router maker, and that speaks to business spending. all of this hitting confidence at a time when markets are up big for the year. i want to start with you. this market pull back, bond yields at two-year highs, and what should my viewers, what should they make of what happened this week? >> they should put it in the
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following context. the equity market has come a long way, as you mentioned. not on an absolute basis, but relative to the world, and it has done so based on two and we'll continue to support the markets, and second on the notion that no matter how sluggish the economic conditions are, companies can continue to be very profitable. last week we got warning signs on both. on the first one the fed continues to signal that it will taper it's support. it will take its foot off the accelerator, not just because the economy is healing, but also because it's worried about the consequences, the collateral damage, of it's experimental policy, and we got two very important signals out of cisco and walmart, as you mentioned, that the corporate sector is starting to have a more difficult time. so people should be more careful because there's also a lot of
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uncertainty coming up in september. >> being more careful of september, the sep-taper on the calga callender. jobless claims the lowest since 2007. that shows health in the labor market. that's what ben bernanke said, when things look good in the labor market again, we'll be able to stop support the economy so much. >> and this should be a good thing. we should feel good about the fact we don't need to be on life support anymore. i think people are concerned about how things are going to go with the fed because we're in unprecedented territory. we have never seen this. i asked the same thing. people are sitting on very big gains, very big profit gains. if you're a money manager, you want to lock in the gains. you don't want to turn around and say, right, actually, we lost money. that's what i heard from a trader this morning. people are booking profits, closing out these long bullish positions they've had. they are not initiated new selling. this is not a wave of new sellers. it's people being cautious and saying i'm going to book that so
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i look good at the end of the year. >> i have been hearing some bulls say they still have targets for the s&p 500 well above here but they were looking for some kind of pause of pullback, mohammed, because they said you can't go up straight all the time. markets go up and markets go down. that is the truth here. we talk about the taper though. it means a return to the fundamentals. stocks, bonds, the market will react based on the fundamentals of the u.s. economy, not based on all the money the fed is pumping into things. what do the fundamentals look like to you? >> they look like the economy continues to heal but it's nowhere near escape velocity. it's not validating the prices that are already in the market, and that's why there's a sense, as you said, that if we get a correction, if prices become less artificial, that will attract the considerable amount of cash that's still on the sidelines. that's why people are saying you need a correction in order to continue the rally, as strange as that may sound.
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>> you can do we'll see more of a pull back in stocks here? >> i think that's certainly a risk. remember what's been pushed back to september. it's not just whether the fed will taper. we have the debate about the debt limit. we have the debate about whether the government will continue to function. in europe we have a very important german election. in japan we will real concern as to whether they're going to deliver on what they called the third arrow. there's a lot of uncertainty that the market has pushed back into september/october, and people are saying, you know what? with all the gains i have made so far, let me book some profits here. >> what is your assumption on interest rates. the irony is if it gets really crazy in washington, then the world starts rushing into treasuries again for a safe haven. so it's kind of -- i don't know, what's your anticipation for what all that would mean for interest rates here? >> so interest rates are responding to three different things. one is less fed support, and that's why interest rates have gone up over the recent few
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weeks. second, there's an outflow of money from bond funds because people are worried that bonds may not be as safe. and then, thirdly, we've had some economic healing. we believe that at this level of interest rates, the market is attractive again as long as you remain in shorter matures. so up to seven-year treasuries, in high quality municipal bonds, and in high quality corporate bonds, but be careful of the long end and be careful of low quality issuance. >> all right. you heard it here directly. thank you so much. nice to see you. thank you. coming up, a win for paula deen in the courtroom but is she winning back her big-time sponsors? find out next. mine was earned in djibouti, africa. 2004. vietnam in 1972. [ all ] fort benning, georgia in 1999. [ male announcer ] usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection
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25% to 35% less likely to get funding than white borrowers with similar credit. for mother stories give me 60 seconds on the clock. it's "money time." move over america, china needs more fuel. china set to become the biggest importer of oil later this year as the u.s. produces more of its own. europe's long recession is officially over. the economy grew by 0.3% in the second quarter. that's the first growth since 2011. paul la deen might be winni in court she's not winning her empire back. deen lost her contracts with the food network, big name sponsors, and her cookbook publisher. now that a judge has tossed out racial bias claims in paending lawsuit, sponsors are still steering clear. only 74% of american women are in the workforce. that's barely budged in the mast 25 years, and trails behind other developed countries. will you still like the way you look without george zimmer.
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men's warehouse released its first commercial without the i guarantee it go. the company dropped zimmer this summer. another ad from jcpenney has moms up in arms. parents say it promotes bullying because it features a kid eating alone thanks to the clothes he's wearing. >> this is why i call them my last cost centers. pefer year the u.s. department of agricultural breaks out what it costs to raise a child from birth to age 18. in 2012 that total cost, $2,410. $2,410.80. that includes food, health care, clothing, transportation, even toys. what it doesn't include, college. number is up about 3% from 2011. at the same time workers wages haven't kept up. i'm going to look at how the american dream is becoming a very different american reality later today on a brand new "your money" at 2:00 p.m. eastern. and it's the new netflix hit everyone is raving about.
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"orange is the new black." two of the stars talk about being on that hit show. it's all about women in prison. that's next on the cnn "newsroom." egypt erupts into full-blown chaos and the world watches in horror. the question now, what can the u.s. do about it? they just keep on coming. now a great grandmother says she, too, was harassed by san diego's mayor. >> he came up to me without any warning when i was outside going home and hugged me and kissed me. >> with the recall efforts starting in 24 hours, how much longer can bob filner hang onto his job.